ThirTeenTh ediTion

MARKETING
Roger A. Kerin • Steven W. Hartley


MARKETING
Thirteenth Edition

Roger A. Kerin

Southern Methodist University

Steven W. Hartley
University of Denver

i


MARKETING, THIRTEENTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2017 by McGraw-Hill
Education. All rights reserved. Printed in the United States of America. Previous editions © 2015, 2013, 2011,
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ISBN 978-1-259-57-3545
MHID 1-259-57-3540

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Library of Congress Cataloging-in-Publication Data
Names: Kerin, Roger A., author. | Hartley, Steven William, author.
Title: Marketing / Roger A. Kerin, Southern Methodist University,
  Steven W. Hartley, University of Denver.
Description: 13th edition. | New York, NY : McGraw-Hill Education, [2017]
Identifiers: LCCN 2015046552 | ISBN 9781259573545 (alk. paper)
Subjects: LCSH: Marketing.
Classification: LCC HF5415 .M29474 2017 | DDC 658.8—dc23 LC record available at
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Steven W. Hartley

iii



PREFACE
Marketing utilizes a unique, innovative, and effective pedagogical approach
developed by the authors through the integration of their combined classroom, college, and university experiences. The elements of this approach have
been the foundation for each edition of Marketing and serve as the core of the
text and its supplements as they evolve and adapt to changes in student learning styles, the growth of the marketing discipline, and the development of
new instructional technologies. The distinctive features of the approach are
­illustrated below:

Rigorous Framework
A pedagogy based on the
use of learning objectives,
learning reviews, learning
objectives reviews, and
supportive student
supplements.

High-Engagement Style
Easy-to-read, highinvolvement, interactive
writing style that engages
students through active
learning techniques.

Marketing,
13/e

Personalized Marketing
A vivid and accurate
description of businesses,

marketing professionals, and
entrepreneurs—through
cases, exercises, and
testimonials—that allows
students to personalize
marketing and identify
possible career interests.

Pedagogical
Approach
Traditional and
Contemporary Coverage
Comprehensive and
integrated coverage of
traditional and contemporary
marketing concepts.

Integrated Technology
The use of powerful
technical resources and
learning solutions, such as
Connect, LearnSmart,
SmartBook,
www.kerinmarketing.com,
and in-text video links.

Marketing Decision
Making
The use of extended
examples, cases, and videos

involving people making
marketing decisions.

The goal of the 13th edition of Marketing is to create an exceptional experience
for today’s students and instructors of marketing. The development of Marketing
was based on a rigorous process of assessment, and the outcome of the process
is a text and package of learning tools that are based on engagement, leadership, and innovation in marketing education.

iv


ENGAGEMENT
The members of this author team have benefited from extraordinary experiences
as instructors, researchers, and consultants, as well as the feedback of users of
previous editions of Marketing—now more than one million students! The authors believe that success in marketing education in the future will require the
highest levels of engagement. They ensure engagement by facilitating interaction between students and four learning partners—the instructor, other students,
businesses, and the publisher. Some examples of high-engagement elements of
Marketing include:
In-Class Activities.  These activities are designed to engage students in discussions with the instructor and among themselves. They involve surveys, online resources, out-of-class assignments, and personal observations. Each activity
illustrates a concept from the textbook and can be done individually or as a team.
Examples include: Designing a Candy Bar, Marketing Yourself, Pepsi vs. Coke
Taste Test, and What Makes a Memorable TV Commercial?
Interactive Web Page and Blog (www.kerinmarketing.com).  Students can access recent articles about marketing and post comments for other students. The
site also provides access to a Marketing Twitter feed!
Building Your Marketing Plan.  The Building Your Marketing Plan guides at the
end of each chapter are based on the format of the Marketing Plan presented in
Appendix A. On the basis of self-study or as part of a course assignment, students can use the activities to organize interactions with businesses to build a
marketing plan. Students and employers often suggest that a well-written plan in
a student’s portfolio is an asset in today’s competitive job market.


v


LEADERSHIP
The popularity of Marketing in the United States and around the globe is the result, in part, of the leadership role of the authors in developing and presenting
new marketing content and pedagogies. For example, Marketing was the first
text to integrate ethics, technology, and interactive marketing. It was also the
first text to develop custom-made videos to help illustrate marketing principles
and practices and bring them to life for students as they read the text. The authors have also been leaders in developing new learning tools such as a threestep learning process that includes learning objectives, learning reviews, and
learning objectives reviews; and new testing materials that are based on Bloom’s
learning taxonomy. Other elements that show how Marketing is a leader in the
discipline include:
Chapter 19: Using Social Media and Mobile Marketing to Connect with Consumers.  Marketing features a dedicated chapter for social media and mobile
marketing. This new environment is rapidly changing and constantly growing.
The authors cover the building blocks of social media and mobile marketing and
provide thorough, relevant content and examples. The authors discuss major social media platforms like Twitter, Facebook, LinkedIn, and YouTube. They explain
how managers and companies can use those outlets for marketing purposes.
Also discussed in Chapter 19 are methods of measuring a company’s success
with social media and mobile marketing. This chapter is one of many ways Marketing is on the cutting edge of the field.
Applying Marketing Metrics.  The Applying Marketing Metrics feature in the
text delivers two of the newest elements of the business and marketing environment today—performance metrics and dashboards to visualize them. Some of
the metrics included in the text are: Category Development Index (CDI), Brand
Development Index (BDI), Load Factor (a capacity management metric), Price
Premium, Sales per Square Foot, Same-Store Sales Growth, Promotion-to-Sales
Ratio, and Cost per Thousand (CPM) impressions. The feature is designed to allow readers to learn, practice, and apply marketing metrics.
Color-Coded Graphs and Tables.  The use of color in the graphs and tables
enhances their readability and adds a visual level of learning to the textbook for
readers. In addition, these color highlights increase student comprehension by
linking the text discussion to colored elements in the graphs and tables.
New Video Cases.  Each chapter ends with a case that is supported by a video

to illustrate the issues in the chapter. New cases such as Amazon, Mall of America,
and Taco Bell, and recent cases such as Chobani Greek Yogurt, X-1 Audio, Secret
Deodorant, LA Galaxy, Carmex lip balm, and StuffDOT provide current and
­relevant examples that are familiar to students.

vi


INNOVATION
In today’s fast-paced and demanding educational environment, innovation is essential to effective learning. To maintain Marketing’s leadership position in the
marketplace, the author team consistently creates innovative pedagogical tools
that match contemporary students’ learning styles and interests. The authors
keep their fingers on the pulse of technology to bring real innovation to their text
and package. Innovations such as in-text links, a Twitter feed, hyperlinked PowerPoint slides, and an online blog augment the McGraw-Hill Education online innovations such as Connect, LearnSmart, and SmartBook.
In-text Links.  You can see Internet links in magazine ads; on television programming; as part of catalogs, in-store displays, and product packaging; and throughout Marketing, 13/e! These links bring the text to life with ads and videos about
products and companies that are discussed in the text. These videos also keep
the text even more current. While each link in the text has a caption, the links are
updated to reflect new campaigns and market changes. In addition, the links allow readers to stream the video cases at the end of each chapter. You can simply
click on the links in the digital book or use your smartphone or computer to
­follow the links.
Twitter Feed and Online Blog.  Visit www.kerinmarketing.com to participate in
Marketing’s online blog discussion and to see Twitter feed updates. You can also
subscribe to the Twitter feed to receive the Marketing Question of the Day and
respond with the #QotD hashtag.
Connect, LearnSmart, and SmartBook Integration.  These McGraw-Hill Education products provide a comprehensive package of online resources to enable
students to learn faster, study more efficiently, and increase knowledge retention. The products represent the gold standard in online, interactive, and adaptive learning tools and have received accolades from industry experts for their
Library and Study Center elements, filtering and reporting functions, and immediate student feedback capabilities. In addition, the authors have developed
book-specific interactive assignments, including (a) auto-graded applications
based on the marketing plan exercises, and (b) activities based on the Applying
Marketing Metrics box and marketing metrics presented in the text.

Innovative Test Bank.  Containing almost 7,000 multiple-choice and essay questions, the Marketing, 13/e Test Bank reflects more than two decades of innovations. The Test Bank includes two Test Item Tables for each chapter that organize
all the chapter’s test items by Bloom’s three levels of learning against both (1) the
main sections in the chapter, and (2) the chapter’s learning objectives. In addition,
a number of “visual test questions” for each chapter reward students who have
spent the effort to understand key graphs, tables, and images in the chapter.

vii


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NEW AND REVISED CONTENT

Chapter 1: New Discussion of Marketing at Chobani, New Showstopper Analysis, and New Material
on the Internet of Everything. Chapter 1 begins with
an update of Chobani’s saavy use of marketing to create a new food category. Examples include Chobani’s
use of a YouTube channel, its introduction of yogurt
cafés, and its development of new products such as
Chobani Flip. New product examples such as Apple
Newton, StuffDOT, and Pepsi True have been added
to the discussion of potential “showstoppers” for
new-product launches. Discussion of “the Internet of
everything” and how data analytics is used to form
relationships with customers has also been added.

Chapter 2: Updated Chapter Opening Example,
New Coverage of Social Entrepreneurship and Marketing Analytics, and the Addition of Apple Watch
to the BCG Analysis. The Chapter 2 opening example discusses how marketing strategies, and “linked
prosperity,” contribute to the product, economic,
and social aspects of Ben & Jerry’s mission. Social entrepreneurship and Forbes magazine’s 30 Under 30
Social Entrepreneurs are now discussed in the Making Responsible Decisions box. In addition a new section discusses tracking strategic performance with
marketing analytics. The application of the Boston
Consulting Group business portfolio model to Apple’s product line has been updated to include
changes such as the introduction of the Apple Watch.

Chapter 3: New Discussion of Changes at Facebook, Update of New Trends in Marketing, and a
New Section on Technology and Data Analytics. Recent changes at Facebook are discussed, including its
purchase of Oculus, the use of drones to transmit Internet signals, and the creation of Creative Labs
which is charged with trying to predict the future. In
addition, discussion of new trends such as increases
in binge-watching; the growing connectivity of cars,
homes, and planes; and the dramatic rise of big data
and data analytics has been added. A new section

about data analytics reports that 50 percent of all

x

managers thought that improving information and
analytics was a top priority.

Chapter 4: New Emphasis on Sustainable Marketing and the Ethics of Buying Counterfeit Products.
New text explains how marketers have embraced societal responsibility through sustainable marketing,
which seeks to meet economic, environmental, and
social needs without compromising the opportunity
for future generations to meet theirs. The financial
impact of counterfeit products has been expanded
and updated.

Chapter 5: New Evaluative Criteria Data and New
Emphasis on Student Trial of VALS. The Alternative
Evaluation discussion has been updated to show new
data for Apple, HTC, Motorola Droid, and Samsung
Galaxy phones. In addition, the Consumer Lifestyle
section now includes additional discussion to increase
student use of the VALS survey and self-assessment
of their personal VALS profile.

Chapter 6: New Chapter Organization, New Marketing Insights About Me Box, and New Buying
Function Section. The first section of the chapter has
been reorganized to reflect the important distinction
between organizational buyers and organizational
markets. In addition, a new Marketing Insights About
Me box has been added to allow students to assess

the diversity practices of potential supplier organizations. A new section on the buying function in organizations has also been added.

Chapter 7: New Examples Related to World
Trade, Countertrade, Exchange Rates, and Market Entry Strategies. The relative influence of the
United States, China, and Germany in world trade
has been updated. In addition, the countertrade
discussion now includes an example of PepsiCo
agreeing to purchase tomatoes in India for its Pizza


Hut division. Other new examples include Procter
& Gamble’s losses due to exchange rate fluctuations, and the significant cost of Target’s entry and
exit from Canada.

Chapter 8: Updated Chapter Opening Example,
New Primary and Secondary Data Coverage, and
New Section on Big Data and Data Analytics. The
chapter opening example has been updated with
new research methods such as “social listening”
which uses Twitter, YouTube, Tumblr, and other social media to monitor movie campaigns. An update
of secondary data sources is included in the Marketing Matters Box and a new discussion of the difficulties of obtaining an accurate assessment of
television viewing behavior has been added. In addition, new examples of Procter & Gamble and
IKEA using observational research techniques, an
online version of the Wendy’s survey, and a new
section Big Data and Data Analytics have been
added. New topics such as data visualization, the
intelligent enterprise, and cloud computing are
introduced.

Chapter 9: Update of Zappos Segmentation

­Approach and New Segmentation Examples. The
discussion of Zappos.com’s successful segmentation strategy has been updated. In addition, examples of segmentation for book series, movies, and
theme parks have been added. Walmart’s new
strategy to compete for the discount chain (e.g.,
Dollar General) segment with Walmart Neighborhood Market stores is also discussed and the Wendy’s product-market grid and discussion have been
updated to reflect new products and digital marketing activities.

Chapter 10: Update of Apple’s New-Product Development Successes and Failures and Greater Emphasis on Open Innovation. The chapter opening
example has been updated to include a history of
Apple’s notable innovation successes and failures and
the introduction of the Apple Watch. The concept of
open innovation has been added and approaches to
implementing open innovation are discussed in the

description of the new-product development process. A new Marketing Matters box discusses the introduction of Google Glass in 2012 and its withdrawal
from the market in 2015. Other new examples include
P&G’s Swiffer WetJet, the Chevy Bolt, and Burger
King’s French fries.

Chapter 11: New Material on Brand Repositioning
at Gatorade, and New Trademark Coverage. The
Chapter 11 discussion of Gatorade now includes its
efforts to reposition the brand and to develop different lines of Gatorade products for different types of
athletes. New examples about Apple’s iPhone 6, Gillette’s Body line of shaving products for “manscaping,” and American Express Green, Gold, Platinum,
Optima Blue, and Centurion cards have been added.
In addition, the Marketing Insights About Me box
­discusses how to check for a business name that features your name, and the text discusses how Kylie
and Kendall Jenner have filed to have their first
names trademarked.


Chapter 12: Updated Discussion of Airbnb, New
Economic Impact Data, and New Advertisements.
An update of Airbnb’s success and its influence on
the sharing economy has been added. In addition,
global and U.S. services valuations have been updated. New advertisements from United Airline, Merrill Lynch, Outward Bound, United Way, American
Red Cross, the United States Postal Service, Hertz,
and Accenture have been added.

Chapter 13: New Chapter Opening Example about
Vizio, and New Marketing Matters Boxes about
Spirit Airlines and Big Data. The new chapter opening example describes VIZIO’s approach to pricing
smart televisions so that they are affordable for the
average consumer. A new Marketing Matters box describes how Spirit Airlines offers fares that are 40 percent lower than other airlines and how customers
assess the value of Spirit’s offerings. In addition, another new Marketing Matters box describes the price
elasticity of demand for cigarettes among different
age groups.

xi


Chapter 14: New Chapter Opening Example about
the Pricing of E-books, New Discussion of Dynamic
Pricing, and New Making Responsible Decisions
Box about “Surge” Pricing. Chapter 14 now begins
with a discussion of the pricing practices related to
printed books and e-books, including the use of odd
prices such as $19.99. The section on dynamic pricing
includes the concept of “surge” pricing, when a company raises the price of its product if there is a spike
in demand. The new Making Responsible Decisions
box asks students to evaluate the economic and ethical perspectives of surge pricing.


Chapter 15: New Amazon Video Case, New Disintermediation Example, Updated Making Responsible Decisions Box. A description of a disagreement
between Amazon and Hachette Book Group about
how e-book revenue should be divided between the
two companies has been added to the disintermediation section. The Making Responsible Decisions box
has been updated to reflect Hewlett-Packard’s use of
recycled plastic in its ink and toner cartridges. The
chapter ends with a new video case about Amazon,
including coverage of its new drone initiative!

Chapter 16: New Chapter Opening Example about
Wearable Technology, Updated Making Responsible Decisions Box, New Section on Data Analytics,
and New Mall of America Video Case. Chapter 16
opens with a description of the potential impact of
wearable technology on consumers and retailers.
Products such as smartwatches, mobile apps, near
field communication, and Apple Pay, and their use at
retailers such as Target, Kohl’s, and Marsh Supermarkets are discussed. The Making Responsible Decisions box now includes information about
Newsweek’s annual “green rankings” and encourages students to review the rankings of their favorite
retailers. In addition, a new section describing data
analytics as the “new science of retailing” has been
added. Finally, the end-of-chapter video case on Mall
of America is completely new!

Chapter 17: New Video Case on Taco Bell, Updated
Discussion of Marketing to College Students, New

xii

Advertisements, and New Example of an IMC Program for a Movie. The Marketing Matters Box has

been updated to include the most recent suggestions
for successful use of mobile marketing to reach college students. New advertisements include examples
from The North Face, Klondike, M&M’s, Gulfstream,
and Jurassic World. The IMC program used to promote the movie Jurassic World has been added to
the Scheduling section. In addition, a new end-ofchapter video case about Taco Bell has been added.

Chapter 18: New Chapter Opening Example about
Virtual Reality, New Advertisements and Sales Promotion Examples, and New Discussion of the Advertising Agency of the Year. The impact of virtual
reality is the new topic of the chapter opening example. Current VR campaigns by Mountain Dew, Game
of Thrones, and Marriott hotels, and future campaigns by Fox Sports and NASCAR are discussed.
New advertising examples from Levi’s, Samsung,
American Red Cross, Whole Foods, Milk Life, the Air
Force, the Meth Project, Bebe, and Old Spice, and
new sales promotion examples from Ben & Jerry’s,
Plenti, and The Tonight Show have been added. In
addition, the chapter includes new discussion of Advertising Age’s Agency of the Year—R/GA.

Chapter 19: New Chapter Opening Example, New
Discussion of Web 3.0, New Section on Mobile Marketing at Facebook, and New Marketing Matters
Box on Mobile Marketing. Chapter 19 opens with a
discussion of the “ultimate marketing machine”—a
smartphone. The discussion includes a summary of
usage rates, current advertising revenue, and likely
future developments. New discussion also includes
the next-generation web, Web 3.0. A new section on
mobile marketing has been added to the discussion
of Facebook. Chapter 19 also includes a new Marketing Matters box about the importance of video in a
mobile marketing campaign.

Chapter 20: Update of the Chapter Opening Example, New Discussion of the Importance of Personal

Selling to Entrepreneurs, and New Photo Examples.
The chapter opening example about GE’s Lindsey


Smith has been updated to include a description of
her new responsibilities and job title. A new discussion about the three reasons personal selling is critical to successful entrepreneurial efforts has been
added. In addition, new photo examples of a
Medtronic salesperson, team selling, and a trade
show have also been added.
Chapter 21: Expanded Discussion about Marketing
in Two Environments, New Marketing Insights
About Me Box, and New Discussion about the
Cross-Channel Consumer. The Marketing in Two
­Environments section now discusses how some retailers provide showrooms for consumers that purchase
online, while some luxury fashion retailers don’t have
an online presence. A new Marketing Insights About

Me box discusses Internet shopping addiction. In addition, the Cross-Channel Consumer section discusses showrooming and webrooming.
Chapter 22: Updated Chapter Opening Example,
Expanded Discussion of Resource Allocation, and
New Marketing Matters Box. The chapter opening
example has been updated to describe how the
strategic marketing process at General Mills has led
to many new products such as Fiber One snack bars,
Chex gluten-free mix, and Warm Delights. The resource allocation discussion now introduces the
­concept of the capitalist’s dilemma. Finally, a new
Marketing Matters box discusses how to create
­innovation in the “blue oceans” of uncontested
­marketspace.


xiii


INSTRUCTOR RESOURCES

Test Bank
We offer almost 7,000 test
questions categorized by
topic learning objectives,
and level of learning.

In-Class Activities
Chapter-specific in-class
activities for today’s students
who learn from active,
participative experiences.
PowerPoint Slides
Media-enhanced and
hyperlinked slides enable
engaging and interesting
classroom discussions.
Practice Marketing
(Simulation)
Practice Marketing is a 3D,
online, multiplayer game
that enables students to gain
practical experiences in an
interactive environment.

Instructor’s Manual

The IM includes lecture
notes, video case teaching
notes, Appendix D case
teaching notes, and
In-Class Activities.

Video Cases
A unique series of 22
marketing video cases includes
new videos featuring Amazon,
Mall of America, and Taco Bell.
Appendix D Cases
Alternate cases for each
chapter for instructors
who elect to assign
additional cases.

Marketing,
13/e
Instructor
Resources

Connect, LearnSmart,
and SmartBook
The unique content platform
delivering powerful technical
resources and adaptive
learning solutions.

Blog

www.kerinmarketing.com
A blog written specifically for
use in the classroom!
Throughout each term we
post new examples of
marketing campaigns, along
with a classroom discussion
and participation guide.

Practice Marketing
McGraw-Hill’s Practice Marketing is a 3D, online, multiplayer game that enables
students to gain practical experience by applying the skills they learn in a highly
interactive and engaging environment. Using the knowledge built on their
course, students become the marketing manager for a company entering the
backpack market. By making decisions and seeing the results, players get feedback on their actions and learn by doing. Practice Marketing is the first in this
series of new digital products from McGraw-Hill. Contact your local rep for
more details.

xiv


Create
Instructors can now tailor their teaching resources to match the way they teach!
With McGraw-Hill Create, www.mcgrawhillcreate.com, instructors can easily rearrange chapters, combine material from other content sources, and quickly upload and integrate their own content-like course syllabi or teaching notes. Find
the right content in Create by searching through thousands of leading McGrawHill textbooks. Arrange the material to fit your teaching style. Order a Create
book and receive a complimentary print review copy in 3–5 business days or a
complimentary electronic review copy (echo) via e-mail within one hour. Go to
www.mcgrawhillcreate.com today and register.

Tegrity Campus

Tegrity makes class time available 24/7 by automatically capturing every lecture
in a searchable format for students to review when they study and complete assignments. With a simple one-click start-and-stop process, you capture all computer screens and corresponding audio. Students can replay any part of any class
with easy-to-use browser-based viewing on a PC or Mac. Educators know that
the more students can see, hear, and experience class resources, the better they
learn. In fact, studies prove it. With patented Tegrity “search anything” technology, students instantly recall key class moments for replay online or on iPods and
mobile devices. Instructors can help turn all their students’ study time into learning moments immediately supported by their lecture. To learn more about Tegrity, watch a two-minute Flash demo at .

®

Blackboard® Partnership
McGraw-Hill Education and Blackboard have teamed up to simplify your life.
Now you and your students can access Connect and Create right from within
your Blackboard course—all with one single sign-on. The grade books are seamless, so when a student completes an integrated Connect assignment, the grade
for that assignment automatically (and instantly) feeds your Blackboard grade
center. Learn more at www.domorenow.com.

McGraw-Hill Campus™
McGraw-Hill Campus is a new one-stop teaching and learning experience available to users of any learning management system. This institutional service allows
faculty and students to enjoy single sign-on (SSO) access to all McGraw-Hill
Higher Education materials, including the award-winning McGraw-Hill Connect
platform, from directly within the institution’s website. With McGraw-Hill Campus,
faculty receive instant access to teaching materials (e.g., ebooks, test banks,
PowerPoint slides, animations, learning objects, etc.), allowing them to browse,
search, and use any instructor ancillary content in our vast library at no additional
cost to instructor or students. In addition, students enjoy SSO access to a variety
of free content (e.g., quizzes, flash cards, narrated presentations, etc.) and subscription-based products (e.g., McGraw-Hill Connect). With McGraw-Hill Campus
enabled, faculty and students will never need to create another account to ­access
McGraw-Hill products and services. Learn more at www.mhcampus.com.

xv



Assurance of Learning Ready
Many educational institutions today focus on the notion of assurance of learning,
an important element of some accreditation standards. Marketing is designed
specifically to support instructors’ assurance of learning initiatives with a simple
yet powerful solution. Each test bank question for Marketing maps to a specific
chapter learning objective listed in the text. Instructors can use our test bank software, EZ Test and EZ Test Online, to easily query for learning objectives that directly relate to the learning outcomes for their course. Instructors can then use the
reporting features of EZ Test to aggregate student results in similar fashion, making the collection and presentation of assurance of learning data simple and easy.

AACSB Tagging
McGraw-Hill Education is a proud corporate member of AACSB International.
Understanding the importance and value of AACSB accreditation, Marketing’s
Test Bank recognizes the curricula guidelines detailed in the AACSB standards
for business accreditation by connecting selected questions in the text and the
test bank to six of the general knowledge and skill guidelines in the AACSB standards. The statements contained in Marketing are provided only as a guide for
the users of this textbook. The AACSB leaves content coverage and assessment
within the purview of individual schools, the mission of the school, and the faculty. While the Marketing teaching package makes no claim of any specific
AACSB qualification or evaluation, we have within Marketing labeled selected
questions according to the six general knowledge and skills areas.

McGraw-Hill Customer Experience
Group Contact Information
At McGraw-Hill, we understand that getting the most from new technology can
be challenging. That’s why our services don’t stop after you purchase our products. You can e-mail our Product Specialists 24 hours a day to get product training online. Or you can search our knowledge bank of Frequently Asked Questions
on our support website. For Customer Support, call 800-331-5094, e-mail
­, or visit www.mhhe.com/support. One of our Technical Support Analysts will be able to assist you in a timely fashion.

xvi



Acknowledgments
To ensure continuous improvement of our textbook and supplements we have utilized an extensive review and development process for each of our past editions.
Building on that history, the Marketing, 13th edition development process included
several phases of evaluation and a variety of stakeholder audiences (e.g., students,
instructors, etc.).
Reviewers who were vital in the changes that were made to the 13th edition and its
supplements include:
A. Diane Barlar
Abe Qastin
Abhay Shah
Abhi Biswas
Abhik Roy
Adrienne Hinds
Ahmed Maamoun
Al Holden
Alan Bush
Alexander Edsel
Alicia Revely
Allan Palmer
Allen Smith
Amy Frank
Anand Kumar
Andrei Strijnev
Andrew Dartt
Andrew Thacker
Andy Aylesworth
Angela Stanton
Anil Pandya
Ann Kuzma

Ann Little
Ann Lucht
Ann Veeck
Annette George
Anthony Koh
Anthony R. Fruzzetti
Aysen Bakir
Barbara Evans
Barbara Ribbens
Barnett Greenberg
Barry Bunn
Bashar Gammoh
Beibei Dong
Ben Oumlil
Beth Deinert
Bill Curtis
Bill Murphy
Bill Peterson
Blaise Waguespack Jr.

Bob Dahlstrom
Bob Dwyer
Bob E. Smiley
Bob McMillen
Bob Newberry
Brent Cunningham
Brian Kinard
Brian Murray
Bronis J. Verhage
Bruce Brown

Bruce Chadbourne
Bruce Ramsey
Bruce Robertson
Bryan Hayes
Carl Obermiller
Carmen Powers
Carmina Cavazos
Carol Bienstock
Carol M. Motley
Carolyn Massiah
Casey Donoho
Catherine Campbell
Cathie Rich-Duval
Cathleen H. Behan
Cathleen Hohner
Cecil Leonard
Cesar Maloles
Charla Mathwick
Charles Bodkin
Charles Ford
Charles Schewe
Cheryl Stansfield
Chiranjeev Kohli
Chris Anicich
Chris Ratcliffe
Christie Amato
Christine Lai
Christopher Blocker
Christopher Kondo
Christopher Ziemnowicz

Chuck Pickett

Cindy Leverenz
Clare Comm
Clark Compton
Clay Rasmussen
Clint Tankersley
Clyde Rupert
Connie Bateman
Corinne Asher
Craig Stacey
Cristanna Cook
Cydney Johnson
Dan Darrow
Dan Goebel
Dan Sherrel
Dan Toy
Daniel Butler
Daniel Rajaratnam
Darrell Goudge
Dave Olson
David Erickson
David Gerth
David J. Burns
David Jamison
David Kuhlmeier
David Smith
David Terry Paul
Deana Ray
Deb Jansky

Debbie Coleman
Debra Laverie
Deepa Pillai
Dennis Pappas
Dennis Rosen
Diana Joy Colarusso
Diane Dowdell
Diane T. McCrohan
Don Weinrauch
Donald Chang
Donald F. Mulvihill
Donald Fuller
Donald G. Norris

xvii


Donald Hoffer
Donald Larson
Donald R. Jackson
Donald V. Harper
Donna Wertalik
Doris M. Shaw
Dotty Harpool
Douglas Kornemann
Dr. Priscilla G. Aaltonen
Duncan G. LaBay
Eberhard Scheuling
Ed Gonsalves
Ed Laube

Ed McLaughlin
Eddie V. Easley
Edna Ragins
Edwin Nelson
Elaine Notarantonio
Eldon L. Little
Elena Martinez
Elizabeth R. Flynn
Ellen Benowitz
Eric Ecklund
Eric Newman
Eric Shaw
Erin Baca Blaugrund
Erin Cavusgil
Erin Wilkinson
Ernan Haruvy
Eugene Flynn
Farrokh Moshiri
Fekri Meziou
Frances Depaul
Francis DeFea
Francisco Coronel
Frank A. Chiaverini
Fred Honerkamp
Fred Hurvitz
Fred Morgan
Fred Trawick
Frederick J. Beier
Gail M. Zank
Gary Carson

Gary F. McKinnon
Gary Law
Gary Poorman
Gary Tucker
George Kelley
George Miaoulis
George Young
Gerald O. Cavallo

xviii

Gerard Athaide
Gerald Waddle
Glen Brodowsky
Glen Gelderloos
Godwin Ariguzo
Gonca Soysal
Gordon Mosley
Greg Kitzmiller
Guy Lochiatto
Harlan Wallingford
Harold Lucius
Harold S. Sekiguchi
Havva Jale Meric
Heidi Rottier
Heikki Rinne
Helen Koons
Herbert A. Miller
Herbert Katzenstein
Howard Combs

Hsin-Min Tong
Hugh Daubek
Imran Khan
Irene Dickey
Irene Lange
Ismet Anitsal
J. Ford Laumer
Jacqueline Karen
Jacqueline Williams
James A. Henley Jr.
James A. Muncy
James C. Johnson
James Cross
James Garry Smith
James Gaubert
James Ginther
James Gould
James H. Barnes
James H. Donnelly
James L. Grimm
James Lollar
James Marco
James McAlexander
James Meszaros
James Munch
James Olver
James P. Rakowski
James V. Spiers
James Wilkins
James Zemanek

Jane Cromartie
Jane Lang

Jane McKay-Nesbitt
Janet Ciccarelli
Janet Murray
Janice Karlen
Janice Taylor
Janice Williams
Jarrett Hudnal
Jason Little
Jay Lambe
Jean Murray
Jean Romeo
Jeanne Munger
Jeff Blodgett
Jeff Finley
Jeffrey W. von Freymann
Jefrey R. Woodall
Jennie Mitchell
Jennifer Nelson
Jerry Peerbolte
Jerry W. Wilson
Jianfeng Jiang
Jim McHugh
Jo Ann McManamy
Joan Williams
Joanne Orabone
Jobie Devinney-Walsh
Joe Cronin

Joe Kim
Joe M. Garza
Joe Puzi
Joe Ricks
Joe Stasio
John Benavidez
John Brandon
John C. Keyt
John Coppett
John Cox
John Finlayson
John Fitzpatrick
John Gaskins
John H. Cunningham
John Kuzma
John Penrose
John Striebich
Jonathan Hibbard
Joseph Belonax
Joseph Defilippe
Joseph Myslivec
Joseph Wisenblit
Juan (Gloria) Meng
Judy Bulin


Judy Foxman
Judy Wagner
Julie Haworth
Julie Sneath

Jun Ma
June E. Parr
Karen Becker-Olsen
Karen Berger
Karen Flaherty
Karen Gore
Karen LeMasters
Kasia Firlej
Katalin Eibel-Spanyi
Kathleen Krentler
Kathleen Stuenkel
Kathleen Williamson
Kathryn Schifferle
Kathy Meyer
Katie Kemp
Kay Chomic
Kaylene Williams
Keith B. Murray
Keith Jones
Keith Murray
Kellie Emrich
Ken Crocker
Ken Fairweather
Ken Herbst
Ken Murdock
Ken Shaw
Kenneth Goodenday
Kenneth Jameson
Kenneth Maricle
Kerri Acheson

Kevin Feldt
Kevin W. Bittle
Kim Montney
Kim Richmond
Kim Sebastiano
Kim Wong
Kimberly D. Smith
Kimberly Grantham
Kin Thompson
Kirti Celly
Koren Borges
Kristen Regine
Kristine Hovsepian
Kristy McManus
Kumar Sarangee
Kunal Sethi
Lan Wu

Larry Borgen
Larry Carter
Larry Feick
Larry Goldstein
Larry Marks
Larry Rottmeyer
Laura Dwyer
Lauren Wright
Lawrence Duke
Lawrence Marks
Lee Meadow
Leon Zurawicki

Leonard Lindenmuth
Leslie A. Goldgehn
Leta Beard
Linda Anglin
Linda M. Delene
Linda Morable
Linda Munilla
Linda N. LaMarca
Linda Rochford
Lindell Phillip Chew
Lisa M. Sciulli
Lisa Siegal
Lisa Simon
Lisa Troy
Lisa Zingaro
Lori Feldman
Lowell E. Crow
Lynn Harris
Lynn Loudenback
Marc Goldberg
Maria McConnell
Maria Randazzo-Nardin
Maria Sanella
Marilyn Lavin
Mark Collins
Mark Weber
Mark Young
Martin Bressler
Martin Decatur
Martin St. John

Marton L. Macchiete
Martyn Kingston
Marva Hunt
Mary Ann McGrath
Mary Beth DeConinck
Mary Conran
Mary Joyce
Mary Schramm
Mary Tripp

Matt Meuter
Max White
Mayukh Dass
Melissa Clark
Melissa Moore
Michael Callow
Michael Drafke
Michael Fowler
Michael Mayo
Michael Peters
Michael Pontikos
Michael R. Luthy
Michael Swenson
Michelle Kunz
Michelle Wetherbee
Mike Hagan
Mike Hyman
Mike Luckett
Milton Pressley
Miriam B. Stamps

Nadia J. Abgrab
Nancy Bloom
Nancy Boykin
Nancy Grassilli
Nanda Kumar
Nathan Himelstein
Neel Das
Nikolai Ostapenko
Norman Smothers
Notis Pagiavlas
Ottilia Voegtli
Pamela Grimm
Pamela Hulen
Parimal Bhagat
Pat Spirou
Patricia Baconride
Patricia Bernson
Patricia Manninen
Paul Dion
Paul Dowling
Paul Jackson
Paul Londrigan
Paul Myer
Peter J. McClure
Philip Kearney
Philip Parron
Philip Shum
Phyllis Fein
Phyllis McGinnis
Poh-Lin Yeoh

Pola B. Gupta

xix


Priscilla LaBarbera
Priyali Rajagopal
Rae Caloura
Rajesh Iyer
Rajiv Kashyap
Ram Kesaran
Randall E. Wade
Randy Stuart
Ravi Shanmugam
Raymond Marzilli
Reid Claxton
Renee Foster
Renee Pfeifer-Luckett
Rex Moody
Rhonda Mack
Rhonda Taylor
Richard C. Leventhal
Richard D. Parker
Richard Hansen
Richard Hargrove
Richard J. Lutz
Richard Lapidus
Richard M. Hill
Richard Penn
Rick Sweeney

Rita Dynan
Robert C. Harris
Robert Jones
Robert Lawson
Robert Luke
Robert Morris
Robert S. Welsh
Robert Swerdlow
Robert W. Ruekert
Robert Williams
Robert Witherspoon
Roberta Schultz
Roger McIntyre
Roger W. Egerton
Ron Dougherty
Ron Hasty
Ron Larson
Ron Weston
Ronald A. Feinberg
Ronald Michaels
Rosemary Ramsey
Roy Adler
Roy Klages
Ruth Ann Smith
Ruth Rosales

xx

Ruth Taylor
S. Choi Chan

S. Tamer Cavusgil
Sally Sledge
Samuel E. McNeely
Sanal Mazvancheryl
Sandipan Sen
Sandra Robertson
Sandra Smith
Sandra Young
Sang Choe
Sanjay S. Mehta
Santhi Harvey
Scott Cragin
Scott Swan
Scott Thorne
Shabnam Zanjani
Sheila Wexler
Sherry Cook
Siva Balasubramanian
Soon Hong Min
Srdan Zdravkovic
Stacia Gray
Stan Garfunkel
Stan Scott
Starr F. Schlobohm
Stephen Calcich
Stephen Garrott
Stephen Pirog
Stephen W. Miller
Steve Hertzenberg
Steve Taylor

Steven Engel
Steven Moff
Sudhir Karunakaran
Sue Lewis
Sue McGorry
Sue Umashankar
Suman Basuroy
Sundaram Dorai
Sunder Narayanan
Susan Godar
Susan Peterson
Susan Sieloff
Susan Stanix
Susie Pryor
Suzanne Murray
Sylvia Keyes
Tamara Masters
Teri Root

Terrance Kevin McNamara
Terry Kroeten
Theodore Mitchell
Theresa Flaherty
Thom J. Belich
Thomas Brashear
Thomas L. Trittipo
Thomas M. Bertsch
Thomas Passero
Tim Aurand
Tim Landry

Timothy Donahue
Timothy Reisenwitz
Tina L. Williams
Tino DeMarco
Tom Castle
Tom Deckelman
Tom Marshall
Tom Rossi
Tom Stevenson
Tom Thompson
Tracy Fulce
Vahwere Kavota
Van R. Wood
Vicki Rostedt
Victoria Miller
Vincent P. Taiani
Vladimir Pashkevich
Vonda Powell
Walter Kendall
Wendy Achey
Wendy Wood
Wesley Johnston
William B. Dodds
William Brown
William D. Ash
William Foxx
William G. Browne
William G. Mitchell
William J. Carner
William Motz

William Pertula
William R. Wynd
William Rodgers
William S. Piper
Wilton Lelund
Yi He
Yue Pan
Yunchuan Liu


This is the first edition of Marketing without William Rudelius as our coauthor. Our
relationship with Bill began as his students at the University of Minnesota, but in addition to being an exceptional professor he also quickly became a mentor, colleague,
and friend.  It was Bill’s idea to write a textbook and many of our innovations such as
video cases, the social media chapter, and in-class activities were the direct result of
his commitment to improving the marketing education experience for students. We
will miss the day-to-day interaction with Bill as he now takes time to travel and continue his research on improving undergraduate education. We are certain, however,
that he will continue to be an influence on the content, appearance, and rigor of this
and future editions. For ourselves, and on behalf of the many students and instructors
who have benefited from Bill’s insights, skills, and professionalism, we cannot say
“thank you” enough.
Thanks are also due to many people, including students, instructors, university staff,
librarians and researchers, business periodical authors and editors, company representatives, and marketing professionals of every kind. Their assistance has been essential
in our efforts to continue to provide the most comprehensive and up-to-date teaching
and learning package available. We have been fortunate to have so many people be
part of our team!
Nancy Harrower of Concordia University, St. Paul led our efforts on the Instructor’s
Manual, the PowerPoint slides, and the In-Class Activities. In addition, she provides the
content for our blog (kerinmarketing.com). Antony Peloso of W. P. Carey School of
Business at Arizona State University was responsible for the Test Bank and Quizzes. Tia
Quinlan-Wilder of the University of Denver was responsible for the LearnSmart component of our interactive learning package. Erin Steffes of Towson University was responsible for the Connect interactives. All of these professors are exceptional educators

and we are very fortunate that they are part of our team. Michael Vessey, our longtime collaborator who passed away last year, also provided assistance in the preparation of the text and supplements.  
Thanks are also due to many other colleagues who contributed to the text, cases,
and supplements. They include: Richard Lutz of the University of Florida; Linda Rochford of the University of Minnesota–Duluth; Kevin Upton of the University of M
­ innesota–
Twin Cities; Nancy Nentl of Metropolitan State University; Leslie Kendrick of Johns
Hopkins University; Lau Geok Theng of the National University of Singapore; and Leigh
McAlister of the University of Texas at Austin. Rick Armstrong of Armstrong Photography, Dan Hundley and George Heck of Token Media, Nick Kaufman and Michelle
­Morgan of NKP Media, Bruce McLean of World Class Communication Technologies,
Paul Fagan of Fagan Productions, Martin Walter of White Room Digital, Scott Bolin of
Bolin Marketing, and Andrew Schones of Pure Imagination produced the videos.
Many businesspeople also provided substantial assistance by making available information that appears in the text, videos, and supplements—much of it for the first
time in college materials. Thanks are due to Daniel Jasper, Jill Renslow, and Sarah
Schmidt of Mall of America; Mike Pohl of ACES Flight Simulation; Chris Klein, Jaime
Cardenas, Casey Leppanen, Heather Peace, and Lori Nevares of LA Galaxy; Carl
Thomas, Peter Dirksing, and Dana Swanson of X-1 Audio, Inc.; Ian Wolfman and Jana
Boone of meplusyou; David Ford and Don Rylander of Ford Consulting Group; Mark
Rehborg of Tony’s Pizza; Vivian Callaway, Sandy Proctor, and Anna Stoesz of General
Mills; David Windorski, Tom Barnidge, and Erica Schiebel of 3M; Nicholas Skally,
­Jeremy Stonier, and Joe Olivas of Prince Sports; Ian Wolfman of imc2; Brian Niccol of
Pizza Hut; Kim Nagele of JCPenney, Inc.; Charles Besio of the Sewell Automotive
Group, Inc.; Lindsey Smith of GE Healthcare; Beverly Roberts of the U.S. Census Bureau;
Sheryl Adkins-Green of Mary Kay, Inc.; Mattison Crowe of Seven Cycles, Inc.; Alisa
­Allen, Kirk Hodgdon, Patrick Hodgdon, and Nick Naumann of Altus Marketing and
Business Development; and Nelson Ng from Dundas Data Visualization, Inc.
Those who provided the resources for use in both the Marketing, 13th edition textbook, Instructor’s Manual, and/or PowerPoint presentations include: Todd Walker and
Jean Golden of Million Dollar Idea; Karen Cohick of Susan G. Komen for the Cure; Liz

xxi



Stewart of Ben & Jerry’s; John Formella and Patricia Lipari of Kodak; Apple, Inc.; Erica
Schiebel of 3M; Karen Cohick of Susan G. Komen for the Cure; Joe Diliberti of Consumer Reports; Patricia Breman of Strategic Business Insights (VALS); Brian Nielsen of
the Nielsen Company; David Walonick of StatPac; Mark Rehborg of Schwan’s Consumer Brands (Tony’s Pizza); Jennifer Olson of Experian Simmons; Kitty Munger and
Mary Wykoff of Wendy’s; Mark Heller of RetailSails; Nicky Hutcheon of ZenithOptimedia; Amy Thompson and Jennifer Allison of Dell, Inc.; Adriana Carlton of Walmart and
Rick Hill of Bernstein-Rein Advertising (Walmart); Janine Bolin of Saks, Inc.; Dr. Yory
Wurmser of the Direct Marketing Association; Elizabeth Clendenin of Unilever (Caress);
Jennifer Katz, Kelsey Fisher, Jenny Caffoe, Lexi Diederich, and Malyn Mueller of
­StuffDOT, Inc.; and Eric Fleming of Segway.
We also want to thank the following people who generously provided assistance
with our Marketing, 13th edition In-Class Activities (ICAs) and associated PowerPoint
presentations: Mitch Forster and Carla Silveira of Ghirardelli Chocolate Company; Karolyn Warfel and Betsy Boyer of Woodstream Corp. (Victor Pest); Leonard Fuld of Fuld
& Co.; Maggie Jantzen of Starbucks Coffee Company; ­Michelle Green and Victoria
Glazier of the U.S. Census Bureau; Lisa Castaldo of Pepsi; Muffie Taggert of General
Mills; Robert M. McMath, formerly of NewProductWorks; Greg Rodriguez; Jeremy
Tucker, Julia Wells, and Lisa Cone of Frito-Lay (Doritos); Susan Carroll and Bob Robinson of Apple, Inc.; Willard Oberton of Fastenal Company; Scott Wosniak and Jennifer
Arnold of Toro; Kim Eskro of Fallon Worldwide (Gold’n Plump); Robin Grayson of
TBWA/Chiat/Day (Apple); Katie Kramer of Valassis Communications, Inc. (Nutella/­
Advil); Triestina Greco of Nutella/Ferrero; Tim Stauber of Wyeth Consumer Healthcare
(Advil); Yvonne Pendleton and Lucille Storms of Mary Kay.
Staff support from the Southern Methodist University and the University of Denver
was essential. We gratefully acknowledge the help of Jeanne Milazzo and Gloria
­Valdez for their many contributions.
Checking countless details related to layout, graphics, clear writing, and last-­
minute changes to ensure timely examples is essential for a sound and accurate textbook. This also involves coordinating activities of authors, designers, editors,
compositors, and production specialists. Christine Vaughan, our lead content project
manager, of McGraw-Hill Education’s production staff and editorial consultant, Gina
Huck Siegert of Imaginative Solutions, Inc., provided the necessary oversight and
hand-holding for us, while retaining a refreshing sense of humor, often under tight
deadlines. Thank you again!
Finally, we acknowledge the professional efforts of the McGraw-Hill Education

staff. Completion of our book and its many supplements required the attention and
commitment of many editorial, production, marketing, and research personnel. Our
McGraw-Hill team included Kim Leistner, Kelly Pekelder, Matt Diamond, Michelle
Whitaker, Danielle Clement, and many others. In addition, we relied on David Tietz for
constant attention regarding photo elements of the text. Handling the countless details of our text, supplement, and support technologies has become an incredibly
complex challenge. We thank all these people for their efforts!
Roger A. Kerin
Steven W. Hartley

xxii


BRIEF CONTENTS
Part 1

Initiating the Marketing Process
1 Creating Customer Relationships and Value through Marketing  2
2 Developing Successful Organizational and Marketing Strategies  26
Appendix A  Building an Effective Marketing Plan  54
3 Scanning the Marketing Environment  70
4 Ethical and Social Responsibility for Sustainable Marketing  100

Part 2

Understanding Buyers and Markets
5 Understanding Consumer Behavior  122
6 Understanding Organizations as Customers  152
7 Understanding and Reaching Global Consumers and Markets  174

Part 3


Targeting Marketing Opportunities
8 Marketing Research: From Customer Insights to Actions  204
9 Market Segmentation, Targeting, and Positioning  236

Part 4

Satisfying Marketing Opportunities
10
11
12
13
14
15
16
17
18
19
20

Part 5

Developing New Products and Services  264
Managing Successful Products, Services, and Brands  290
Services Marketing  320
Building the Price Foundation  348
Arriving at the Final Price  370
Appendix B  Financial Aspects of Marketing  397
Managing Marketing Channels and Supply Chains  406
Retailing and Wholesaling  434

Integrated Marketing Communications and Direct Marketing  468
Advertising, Sales Promotion, and Public Relations  498
Using Social Media and Mobile Marketing to Connect with Consumers  538
Personal Selling and Sales Management  566

Managing the Marketing Process
21 Implementing Interactive and Multichannel Marketing  596
22 Pulling It All Together: The Strategic Marketing Process  620
Appendix C  Planning a Career in Marketing  652
Appendix D Alternate Cases, available in SmartBook or Connect Instructor
Resources
Glossary 673
Name Index  683
Company/Product Index  691
Subject Index  698

xxiii


DETAILED CONTENTS
Part 1

Initiating the Marketing Process
1

CREATING CUSTOMER RELATIONSHIPS AND VALUE
THROUGH MARKETING  2
At Chobani, Marketing Is “Nothing But Good”!  2
Understanding Consumers’ Food Values  2
Reaching Customers  2

Chobani Today  3
Chobani, Marketing, and You  3
What Is Marketing?  4
Marketing and Your Career  4
Marketing: Delivering Value to Customers  5
The Diverse Elements Influencing Marketing
Actions 5
What Is Needed for Marketing to Occur  6
How Marketing Discovers and Satisfies Consumer
Needs 7
Discovering Consumer Needs  7
The Challenge: Meeting Consumer Needs with New
Products 7
Satisfying Consumer Needs  9
The Marketing Program: How Customer Relationships
Are Built  10
Relationship Marketing: Easy to Understand, Hard to Do  10
The Marketing Program and Market Segments  12
3M’s Strategy and Marketing Program to Help Students
Study 12
How Marketing Became So Important  14
Evolution of the Market Orientation  14
Focusing on Customer Relationship Management  15
Ethics and Social Responsibility in Marketing: Balancing the
Interests of Different Groups  16
The Breadth and Depth of Marketing  17
Learning Objectives Review  19
Learning Review Answers  19
Focusing on Key Terms  20
Applying Marketing Knowledge  20

Building Your Marketing Plan  20
Video Case 1: Chobani®: Making Greek Yogurt a
Household Name  21
Chapter Notes  24

2

DEVELOPING SUCCESSFUL ORGANIZATIONAL AND
MARKETING STRATEGIES  26
Making the World a Better Place, One Scoop
at a Time!  26

xxiv